In the past decade, we have seen investments being made in both the corporate and educational environments to educate people about good habits, including internet and data safety and the management of mental health. However, little is being said about financial literacy in school curriculums, successful retirement planning, the management of unnecessary spending and investments, and even the workplace.
Learning good financial habits and the reasoning behind them is now one of the best tools people can be equipped with from childhood, and it is one lesson you can continually reap the benefits from.
Financial Obligations Are Starting From A Young Age
It is said that children learn financial habits from the age of 7, which makes it the prime time to instill basic financial lessons. Multiple studies have also shown positive results for those taught financial literacy in their childhood: they grow up to be happier, healthier, and more confident adults.
Therefore by instilling these lessons in their childhood, you are, in turn, improving the quality of their adult life. Given the increasing need for its presence, having financial education as a part of the school curriculum is becoming more called for.
Almost 69 percent of students are heading off to college with student loans, college graduates are leaving with over $30,000 in student loan debts, and 48 percent of those under 25 are now holders of credit cards.
While parents play a large part in this education, the inclusion of personal finance courses or monetary-based lessons in maths courses offered in elementary and high school can go a long way in building a solid foundation.
Financial Literacy May Rectify The Saving, And Debt Dilemma Households Are Now Facing
As it stands right now, America is facing a crisis in both the retirement and savings departments. In February 2019, consumer debt hit the $4 trillion mark, and households carried an average of $50,210 in debt for the fourth quarter of 2018.
Debt delinquency rates continue to rise slowly on loans, including car payments and student loans. While credit card delinquency rates are declining, balances are not, and the pressure is being felt on household income, although this rose by 3.7 percent between 2017 and 2018.
Also, savings are low, with households having an average of $8,863 in their bank accounts, including two-income households.
A staggering amount of consumers are also unprepared for emergencies and ill-equipped to pay for those occurrences.
All of these add up to one crucial skill: money management. Skills such as budgeting and the right management of debt (including interest rates) can help individuals account for their income and make conscious decisions when entering into debt agreements.
Being financially literate means not just knowing about your financial options but being familiar with the terms attached and how best to use them.
Business Entrepreneurship Rates Are Rising – And So Is The Need For Financial Literacy
More people are leaping and beginning their businesses. As business owners or even managers, you face many different and sometimes significant decisions. Financing is one of the pillars of any business.
Therefore, entrepreneurs must be equipped with the right financial knowledge to ensure the success of their business.
Being financially literate means they can understand what is going on and maintain a strong grasp of certain concepts, such as the cost of capital. It also means they can locate institutions and financial services available locally and suitable for their specific needs.
In the end, this equates to better and more informed decisions. The impact is felt by the workforce, as well. Almost 60 percent of Americans are not offered financial education in school or by their employers.
There continues to be a lack of financial literacy workshops and resources at work, which is a major source of financial stress amongst workers.
Being Prepared For Retirement Entails Being Armed With Good Financial Habits
Retirement planning is not done overnight. Northwestern Mutual’s 2018 Planning and Progress Study showed just how unprepared people are for life after retiring. In it, 21 percent of people had nothing saved, and another 33 percent had less than $5,000 saved.
It is something that requires commitment over time and a well-thought-out financial plan. Yet most people do not know how to begin preparing for their retirement or the importance of a financial plan overall.
Research from Charles Schwab showed that only 20 percent of people have written plans, and more importantly, they think that tools such as financial and retirement plans are more suited for people with high measures of wealth.
This, however, is untrue. A financial plan is suited to everyone on the wealth scale, and more importantly, such a plan should focus on the benefit it brings instead of wealth tiers.
By following a plan, you can exhibit better money behaviors, including the tendency to pay bills on time, provide for emergencies, and plan for the future by securing life and health insurance. Without this, you are left vulnerable to the debt spiral.
There is no question that financial education has its place in our lives. Based on the continuous benefits it provides throughout important stages in people’s lives, it should be made a priority. It is a key part of the answer to financial security, retirement success, and even stable business startups.
Investing in Your Financial Education is the First Step to More Wealth
Figuring out where to invest your cash is one of the most important things any person can do. You know that if you want your money to grow in the years ahead, it can’t just stay in your bank account doing nothing. You need a plan to add more value to your portfolio, one careful purchase at a time.
There are plenty of different ways that you can get started with investing. Some people take the long-haul option and watch their assets grow over time. Other people explore day trading strategies and take a more active approach to making money daily.
Aside from figuring out how you spend your cash, you also need to decide what you will focus on. Other than stocks, you’ve got options like futures, forex, and bonds to think about. But before you do any of that, the first thing you should invest in is your education.
Developing Your Trading Skills
Any broker or financial advisor will tell you that you need to learn if you want to make money. That means spending as much time as possible on the internet, reading articles, reviewing courses, and more.
Some brokerage companies have educational facilities where you can learn more about the industry and what different terms mean.
Wherever you decide to go for your education, make sure that you can trust your source. Many people share tips online, claiming they’re professionals who aren’t as helpful as they seem.
Learning how to handle your money when buying and selling assets is crucial because making money requires a careful and consistent strategy. If you don’t have the right mindset, it’s easy for emotions to get the better of you.
Sometimes, this means that you end up spending cash on things that aren’t going to work for you.
Invest in Lifelong Learning
Crucially, when you decide to spend money and time on your education in the trading landscape, it’s worth remembering that you don’t just need to hone your skills initially.
Although it’s essential to have the correct information before making your first trade, you must keep building your resources and gaining more knowledge.
The marketplace is constantly changing, and your strategies will give you an insight into which trends and red flags you need to look for when stepping in and out of market positions.
Another thing to remember is that not all of the information you find online will be reputable.
There will be people out there that try to drive you in the wrong direction by giving fake hints and tips designed to influence how you spend. Keep your eyes open, and always do your due diligence.
Double-checking the facts available to you before you buy anything is a great way to protect your portfolio. Only after you put the right amount of time into your education will you be confident to begin making money online.
Help You To Invest In Properly
While the global property crash in 2008 and 2009 may have cooled investors off somewhat, those who happened to get into the property market back then are reaping the rewards.
Just recently, figures revealed that Sydney had an increase of 89% on their waterfront properties.
For an investor, this is an enormous increase in their investment and certainly an avenue worth exploring. For the new investor, it may not be necessary to be based in one of the big cities such as New York or Dubai to reap the rewards of the property.
These properties don’t need to be mortgage-free either to start making some money if only investors knew the potential.
One of the most important things to consider before purchasing a property as an investment, or remodeling an existing one, is to do the math.
Unless there’s an influx of cash to improve the equity in the property immediately and benefit from that additional equity, property investment can take a bit of time.
Those considering a mortgage to purchase their investment property must also consider other costs such as fees, insurance, and taxes. These should all be worked into the projection to determine whether the investment is lucrative.
A buy-to-let property is a great way to maximize the returns on investment, especially if it is mostly a cash purchase.
Even those with a portion of their investment financed still benefit from having a tenant pay back some or all of the installment.
Eventually, as the market increases and the outstanding capital decreases, investors should have some equity in the property, which could help them finance repairs and maintenance, or perhaps even their next property. Accessing equity in a property is a convenient and fairly inexpensive form of finance.
Certain properties offer more than the potential to provide a rental income to the investor. For instance, business owners who previously rented their premises from a landlord can own their property and add it to their list of assets.
Another investment option is for those who prefer short-term leases, such as vacation letting and Airbnb. Investors can also purchase their properties to renovate and sell them at a higher price, known as a property flip.
One of the most important components of good property investment is exercising care and patience. An initial investment into a property might require a cash lump sum.
However, those who have the patience to wait for the return seldom go unrewarded.
Learn To Use Inherited Wealth To Build An Empire
Not many would disagree that money is the most important thing in life, no matter what those self-development ads tell you. You need money for everything; the truth is, you won’t get far without money.
Yet, many people with money fail to use it properly and spend it aimlessly and pointlessly, which is the biggest mistake you can make.
People who end up making this mistake the most have inherited their wealth; you suddenly find yourself inheriting wealth, and you don’t know what to do with it.
The answer to that is you build an empire with it!
Squandering your inherited wealth of cars, sustainable houses, luxuries, and so on is a complete waste. The best way to use that money is to build an empire, which is how you can do it.
There’s no shame in admitting you’re new to this. The wisest people are those who realize they’re in over their heads for the time being and could use some help to find their way through their newly found wealth.
Help can be getting some money to get you started until your inheritance is settled in the courts, which can be a long process.
You can get a down payment on your inheritance by resorting to companies that specialize in these things; learn about how you can advance your inheritance.
Help can also mean getting an expert’s guidance to organize your investment and financial affairs, which is something you should consider.
The most important thing you can do with your inheritance is to invest it.
This is how you can double or triple, or even more, your money, and it’s your first step to building an empire that can outgrow anything you’ve ever dreamed of. Your best approach to the whole investment angle is diversifying your portfolio.
That means investing in different areas to ensure maximum profitability.
For instance, real estate is the safest and most secure investment, but it’s long-term. So, you might want to invest in stocks, perhaps for a quick gain, and so on. The important thing is to keep your options open.
Find something you love
Investment and getting expert help aside, perhaps the key to building your empire is finding a niche you truly love.
Most people who have built empires have invested their time and money doing things they love and enjoy — and are quite good at.
It can be as small-scale as opening a bakery, but if you love it and are good at it –– and with enough initial investment from your inheritance –– that a bakery can grow to be a worldwide franchise with stores in dozens of countries.
Finding your niche is quite worth it because while money is important, and making loads of it is important, it’s even better to do so while doing something you truly enjoy.
After all, who amongst us can say they’re fortunate enough to get rich doing the things they love the most?